Cross merchandising occurs when businesses place two or more products next to each other on display to encourage customers to purchase multiple items.
As a marketing strategy, cross merchandising encourages upsells by reminding the consumer that two or more products connect with each other or benefit one another. This can happen in explicit ways, like placing peanut butter next to jelly, or in more subtle ways, like placing the marinade and condiment section next to the meat section in a grocery store. Each of these strategies reminds the consumer that the products are connected.
Another way businesses use cross merchandising is by placing a higher-ticket item, such as a laptop, next to an “add-on” item, like a power cord. The consumer sees the smaller item as adding value to the larger item and is thus incentivized to buy both.
Businesses might also place contrasting items near each other, such as a food item on the endcap of an electronics aisle, which helps the item stand out from the crowd.